Your first step is to ask your lender if you can shop for title services, including title insurance, the title search, and possibly a title agent. On page 2, section C, you will find a list of “title services,” according to the Consumer Financial Protection Bureau. Consumer Financial Protection Bureau says you can shop for any of the services listed here.
It’s also important to figure out what kind of professional you need. Settlement agents of title insurance companies handle home closings in most states. However, in other areas of the country, you won’t need a title company. Rather, you will hire a real estate closing attorney or an escrow agent. Any of these professionals would benefit from this article.
Get referrals from people you trust when you begin looking for the best title company. Find out from your friends, family members, and real estate agent what they think of the title company. Do they feel comfortable using them again?
Then, start doing your online research and look for these things:
A title company may perform the title search, issue title insurance, and handle the closing for you. As well, your closing costs will be kept in escrow accounts until you close the loan. You want someone reputable and trustworthy since they will be coordinating perhaps the biggest purchase of your life.
The company should have an easily accessible website that describes their professional experience, their address, the services they offer, testimonials from former clients and links to their social media pages.
Check out the website and then online reviews. You can gain a lot of insight from Google and Yelp reviews about previous transactions handled by the title company. Watch for patterns of complaints.
Additionally, the title search company should use up-to-date technology to prevent mistakes and safeguard your information. If they skip a step, your purchase could be delayed or incorrectly handled.
This could result in costly mistakes. The title company conducted a routine search of a home’s sellers in one example. Only the husband’s finances were verified. A $80,000 lien was put on the house by the wife’s credit card company three days before closing. But the buyer did not know about it.
Title insurance paid off the lien in this case. However, a diligent, reputable title company with years of experience likely wouldn’t ignore this step.
Compare the prices of several reputable title companies before making your choice. Fees, service inclusions, and price changes should be disclosed by the company.
Make sure this fee is included in the final Loan Estimate or Closing Disclosure you receive from your lender. Fees for title services should be included in section B or C of page 2 of your Loan Estimate, or on page 2 of your Closing Disclosure.
Your title company should be close by, since you’ll have to sign closing documents in person. Find out whether the company has satellite offices in the area. Can the title company send an agent to meet you halfway if distance is an issue?
Who chooses the title company: Buyer or seller?
The title company is chosen by the buyer under the Real Estate Settlement Procedures Act. Alternatively, the seller may suggest a different contractor if they prefer to work with someone else.
The buyer should make the choice because “the seller has nothing to gain by choosing a good title company.” The seller might select someone they know-causing the title search to be tainted-or simply choose the company with the lowest price and the least reputation.
How to choose a title company when refinancing
Title searches are also required during a refinance, and the homeowner can once again select the title company. When you had a good experience with the original title company, we recommend using that company again.
A discount may be available because the attorney already has the title work in the file and they already have most of the data they need. It only needs to be updated.
Title company alternatives
If you aren’t happy with your title search company options, you might not have an alternative. Go over your state laws and ask your real estate agent for advice. You might be able to hire a real estate attorney in lieu of a title company. But do not forgo a title search altogether.
As the settlement agent, you need someone to put the numbers together, to research the title. An attorney who specializes in real estate should be hired. Attorneys and litigators don’t understand what we do.
You want to make sure that the company closing the deal is a reputable firm after the long process of buying a home. Make sure the closing runs smoothly by researching the title search company’s reputation, experience, and how they bill.